Washington DC (SPX) Oct 19, 2010
A coalition of farm and food industry trade associations representing every step of the food chain from meat and poultry producers, restaurants, bakers to other food manufacturers has issued the following statement in response to the Environmental Protection Agency's announcement that it would allow the sale of gasoline containing 15 percent ethanol ("E15") for cars manufactured in the 2007 model year or later.
E15 - which would be a 50 percent increase from the currently permitted level of 10 percent ethanol in gasoline - will result in dramatic increases in the portion of the U.S. corn crop used to make fuel rather than food and, when fully implemented, could result in more than 40 percent of the nation's corn crop being diverted to ethanol production.
The corn ethanol industry has received over $30 billion in federal subsidies over the last three decades.
These farm and food industry groups criticized the decision, noting that it is certain to accelerate the recent dramatic rise in corn prices, and questioned whether the EPA decision is legally sound.
Members of the Coalition include the American Meat Institute, the Grocery Manufacturers Association, the National Council of Chain Restaurants, the National Chicken Council, the American Frozen Food Institute, the American Bakers Association, the National Meat Association and the National Turkey Federation.
The Coalition commented: "The EPA's decision will have an impact on American farmers, food manufacturers and, most importantly, American consumers, who will face price increases at the grocery store and when they go out to eat in a restaurant. EPA took this step without sufficient regard for the inevitable effect on the price of food and feed."
The Coalition continued: "After decades of federal subsidies and fuel mandates, the corn-based ethanol industry should stand on its own two feet and stop depending on the United States taxpayer for unneeded and unwarranted support. Enough is enough."
Responses from Members of the Coalition
Grocery Manufacturers Association Vice President for Federal Affairs Scott Faber said: "We are disappointed in the Administration's decision to allow more ethanol in gasoline before truly sustainable advanced biofuels are commercially available. Not only will this decision adversely affect millions of consumers who don't drive brand new cars, but also countless Americans who are struggling to feed their families in a slowly recovering economy. Recent spikes in corn prices due to supply concerns will only be exacerbated by this decision."
National Council of Chain Restaurants Vice President Scott Vinson said: "Economists were already forecasting higher food prices over the coming year, and the decision by the EPA is sure to make the situation even worse. The restaurant industry's small business franchisees are already struggling to make it as the economy tries to recover, and more piling on by the federal government is the last thing they need."
National Chicken Council President George Watts said: "Rising grain prices driven by the voracious demand for feedstock from the heavily subsidized ethanol industry caused an increase of six percent in the retail price of fresh whole broiler chickens from 2008 to 2010. Channeling even more corn into ethanol will, in time, only drive up the cost of chicken even more. Consumers will end up paying for the ethanol industry's demands. It is time to put an end to government mandates and interference in the market that raise the price of corn."
American Bakers Association President and CEO Robb MacKie said: "EPA's decision to increase the ethanol blend to E15 will further increase volatility in the grain markets. Other grains, including wheat, may increasingly be in shorter supply; potentially this may impact food prices in the future as the nation continues to lose wheat acreage. ABA strongly opposes this ill advised decision and calls on EPA to consult with relevant government agencies to carefully study how this would impact market volatility, to review the science behind the decision and analyze the economic impact on the already weakened economy."
National Meat Association CEO Barry Carpenter said: "EPA's action regarding the E15 waiver barely puts a band-aid on the oil dependency it is intended to alleviate, yet negatively impacts food security by further raising food and feed prices. Higher feed prices will eventually be passed on to consumers in higher meat and poultry prices. This is not a good decision for either consumers or U.S. agriculture."
National Turkey Federation President Joel Brandenberger said: "Feed accounts for 70 percent of the total cost of raising a turkey, and corn is the single-largest ingredient in turkey feed. The spike in corn prices caused by the expansion of corn-based ethanol could be crippling at a time when the turkey industry is just starting to recover. This dramatic increase in feed prices has led most turkey processors to cut production. Increasing the ethanol blend to 15 percent would destroy any chance our industry has of recovery in the near future."
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